"Bud Selig is delighted at how baseball's enhanced revenue-sharing plan is working out, and why not? Forbes Magazine notes that since the plan went into effect, the Brewers' share has increased from $2 million a year to $18 million, which makes it one of the game's most profitable teams. Not bad considering the Brewers' $28 million payroll and 12 straight losing seasons."

Yea I pity those poor owners losing so much money.

Lip

ondafarm

11-11-2004, 01:53 PM

If only they could come up with a straight-forward solution to revenue sharing. Something like, ". . . all TV money is divied up equally among all teams, each team keeps radio and merchandising money. All TV money must be spent on player salaries (including minor leaguers.) . . . " But the owners would hate this, it'd make the Yankees ordinary.

Fenway

11-11-2004, 02:00 PM

If only they could come up with a straight-forward solution to revenue sharing. Something like, ". . . all TV money is divied up equally among all teams, each team keeps radio and merchandising money. All TV money must be spent on player salaries (including minor leaguers.) . . . " But the owners would hate this, it'd make the Yankees ordinary.
Bill Veeck saw this coming 50 years ago when he owned the St Louis Browns. He always argued the Browns should get 50% of the tv money when a game was televised in NY as the Yankees can't play themselves.

PaleHoseGeorge

11-11-2004, 02:03 PM

If only they could come up with a straight-forward solution to revenue sharing. Something like, ". . . all TV money is divied up equally among all teams, each team keeps radio and merchandising money. All TV money must be spent on player salaries (including minor leaguers.) . . . " But the owners would hate this, it'd make the Yankees ordinary.
The owners DO NOT want revenue sharing unless the revenue to be shared is the revenue they get from the players. NOTHING is preventing the owners from any of what you outlined above except the greediness of the owners to keep the profits they already have and grab for what they don't, namely the future growth on players' salaries everyone with a brain* knows will occur.

* notice I had to qualify this assertion to take into account a few of the know-nothing posters here.

JKryl

11-11-2004, 06:02 PM

From Ron Rapoport's column today in the Sun-Times:

"Bud Selig is delighted at how baseball's enhanced revenue-sharing plan is working out, and why not? Forbes Magazine notes that since the plan went into effect, the Brewers' share has increased from $2 million a year to $18 million, which makes it one of the game's most profitable teams. Not bad considering the Brewers' $28 million payroll and 12 straight losing seasons."

Yea I pity those poor owners losing so much money.

Lip
Thank God the White Sox will never have to worry about paying. It would kill poor Jerry.

Daver

11-11-2004, 08:14 PM

The owners DO NOT want revenue sharing unless the revenue to be shared is the revenue they get from the players. NOTHING is preventing the owners from any of what you outlined above except the greediness of the owners to keep the profits they already have and grab for what they don't, namely the future growth on players' salaries everyone with a brain* knows will occur.

* notice I had to qualify this assertion to take into account a few of the know-nothing posters here.
There is one thing that prevents the owners from sharing revenue, the fact that they don't trust each other anymore than anyone, including congress, trusts them.

All national TV money, FOX and ESPN for the most part, is shared revenue, as is post season TV money. It is doled out to the teams as the office of the commisioner sees fit, the same as luxury tax funds. It is never revealed as to what portion of that money stays in the MLB coffers, nor is it known what happens to the checks due to the Montreal Expos.

These guys can't trust their own hand-picked commisioner, how in the hell would anybody expect them to trust each other?

ondafarm

11-11-2004, 08:36 PM

These guys can't trust their own hand-picked commisioner, how in the hell would anybody expect them to trust each other?
Maybe they could pick an accounting firm to trust. ?

IMHO, it's not a lack of trust, its greed. A monkey could run the White Sox well enough to turn a profit, case in point, JR. But if you forced him to compete on a level playing field with Minnesota, Cincinnatti and San Diego do you think he could turn a profit? Not likely. The owners that have an advantage don't want to give it up and the small market teams don't have enough muscle to force real revenue sharing.

Daver

11-11-2004, 09:19 PM

Maybe they could pick an accounting firm to trust. ?

IMHO, it's not a lack of trust, its greed. A monkey could run the White Sox well enough to turn a profit, case in point, JR. But if you forced him to compete on a level playing field with Minnesota, Cincinnatti and San Diego do you think he could turn a profit? Not likely. The owners that have an advantage don't want to give it up and the small market teams don't have enough muscle to force real revenue sharing.
Where does the lack of trust stop and the greed start? That line is so blurred you couldn't find it with the Hubble telescope.

Are you trying to say that those teams you mentioned don't make a profit? If you are you are mistaken, every one of those teams is worth more now than it was when the current owner bought it.

MLB would benefit greatly from an autonomous commisioner.

ode to veeck

11-11-2004, 09:26 PM

but Bud is autonomous .. he does whatever the heck he wants and doesn't have to tell the truth

Fenway

11-11-2004, 09:30 PM

What Forbes wrote

http://www.forbes.com/forbes/2004/1101/056a_print.html

Buddy System
Kurt Badenhausen, 11.01.04

For 12 years baseball commissioner Allan (Bud) Selig has been the walking definition of a conflict of interest--serving as both a team owner and the person in charge of the game. Now that dual role is about to deliver a financial home run for Selig.

Selig and his partners paid a bankruptcy court $11 million in 1970 for the Seattle Pilots (the current Milwaukee Brewers). When he became commissioner, Selig's 28% stake in the team went into a trust. Now the Brewers are being sold to Los Angeles investor Mark Attanasio for a reported $220 million. Last year the Anaheim Angels, fresh off a World Series win, sold for $184 million. How did the Brewers' owners get 20% more than the Angels for a losing team in a TV market less than 20% the size of Los Angeles'?

Two years ago Selig engineered new revenue-sharing requirements to help small-city teams compete with big-city teams. The Brewers' revenue-sharing payment climbed from $2 million to $18 million. But they didn't sink this money into talent. The team's $28 million payroll this year was baseball's lowest and down from $50 million in 2002. The team suffered through its twelfth straight losing season. But the Brewers were one of baseball's most profitable teams this year, what with revenue sharing, a low payroll and a new stadium. A Selig spokesman insists the trust arrangement protects him from a conflict of interest. He also says the Brewers are spending more on player development.

Lip Man 1

11-12-2004, 01:13 PM

I remember reading many times about George Steinbrenner getting violently angry at owner meetings talking about revenue shariung.

One time he said that he'd agree to revenue sharing when then Twins owner Calvin Griffith kicked off all his relatives off the team payroll and when he told the Expos one time that he'd agree to revenue sharing when he was allowed to look at their books.

Considering what has now come out about the Brewers, the Reds and the Royals in the past two years, it seems clear to me that these 'poor' clubs are pocketing a large portion of that shared money instead of signing players and developing their franchises.

Nice con job those clubs have done to the rest of MLB.

My solution, fold em' or force new ownership in based on the guarantee that they have to spend revenue sharing money on getting players...not fixing the stadium...not paying it out to untested draft picks or to the nebulous term 'minor league player development.' Since the odds are remote who could sign, develop and keep enough good players at the same time to start winning in two or three years.

Lip

Flight #24

11-12-2004, 01:30 PM

I remember reading many times about George Steinbrenner getting violently angry at owner meetings talking about revenue shariung.

One time he said that he'd agree to revenue sharing when then Twins owner Calvin Griffith kicked off all his relatives off the team payroll and when he told the Expos one time that he'd agree to revenue sharing when he was allowed to look at their books.

Considering what has now come out about the Brewers, the Reds and the Royals in the past two years, it seems clear to me that these 'poor' clubs are pocketing a large portion of that shared money instead of signing players and developing their franchises.

Nice con job those clubs have done to the rest of MLB.

My solution, fold em' or force new ownership in based on the guarantee that they have to spend revenue sharing money on getting players...not fixing the stadium...not paying it out to untested draft picks or to the nebulous term 'minor league player development.' Since the odds are remote who could sign, develop and keep enough good players at the same time to start winning in two or three years.

Lip
Agreed, except that I think unless you make some changes to the structure of the draft that you need to allow bad teams to focus resource on signing their otp picks if needed. Otherwise you end up having Prior situations all over again, which IMO is bad.

One Q: In the past CBS negotiations, I remember specifically that the owners proposed both a salary floor (which would accomplish similar things to Lip's idea), and increased revenue sharing, but were kiboshed on both by the union. That 2d point would directly contradict Daver's comment on how owners can share revenues anytime they want. Anyone know the specifics of those proposals and what the issues were?

PaleHoseGeorge

11-12-2004, 02:02 PM

One Q: In the past CBS negotiations, I remember specifically that the owners proposed both a salary floor (which would accomplish similar things to Lip's idea), and increased revenue sharing, but were kiboshed on both by the union. That 2d point would directly contradict Daver's comment on how owners can share revenues anytime they want. Anyone know the specifics of those proposals and what the issues were?
You're confused. It was the owners' "independent blue ribbon" committee that suggested a salary floor, not the owners. In the course of negotiations over the last CBA (2002) the owners specifically pursued a payroll "luxury tax" concept, not a salary floor. In other words, they ignored their own committee's recommendation. The committee also recommended sharing TV/radio money but the owners didn't do that either except for the national package. Everyone knows the real discrepancy in revenue is generated on local TV/radio deals, not the national ones.

The players don't want any kind of restriction on their free agent rights. They're not much interested in either a maximum or a minimum payroll. The former only serves to limit their salaries, and the latter isn't of any consequence to them, only the owners'.

Do you ever get the impression the owners are only looking for whatever cover they can get for hiding their true motives for crying poor?
:cool:

For the record, a salary floor doesn't address competitive balance. You'll always have teams spending money foolishly and cheating on whatever yardstick is created to measure "shared revenue."

Flight #24

11-12-2004, 02:19 PM

You're confused. It was the owners' "independent blue ribbon" committee that suggested a salary floor, not the owners. In the course of negotiations over the last CBA (2002) the owners specifically pursued a payroll "luxury tax" concept, not a salary floor. In other words, they ignored their own committee's recommendation. The committee also recommended sharing TV/radio money but the owners didn't do that either except for the national package. Everyone knows the real discrepancy in revenue is generated on local TV/radio deals, not the national ones.

For the record, a salary floor doesn't address competitive balance. You'll always have teams spending money foolishly and cheating on whatever yardstick is created to measure "shared revenue."Hmmm....I'll see if I can find the articles, but I thought there were specific comments that the owners introduced salary floor proposals in the CBA but Fehr shot them down using a "we don't want to put any restrictions on how owners decide to run their teams" argument.

As for the floor, you're right, it doesn't improve balance, but it does help make sure that teams aren't just pocketing revenue sharing $$$ (or at least pocketing less of it). I don't think competitive balance is something that can ever be legislated, but you can assist it by doing things that put more resources towards the on-field product.

EDIT: Here's a quote on the floor from ESPN (http://espn.go.com/sportsbusiness/s/2002/0814/1418040.html)

Since the baseball players union objects to having a salary floor, there's no guarantee that money earned from the tax by the teams that don't surpass the threshold would be put back into the payroll. Management has suggested a payroll floor of $45 million, but that includes the 40-man roster and benefits. Only two teams, Montreal and Tampa Bay, fall below that figure now.
Now I'm not saying a $45mil floor helps much of anything, but had this been a negotiated point rather than being dismissed, a floor of say $55mil would have affected 12 teams, all of whom got revenue sharing.

Fenway

11-12-2004, 02:31 PM

2001 was the last year MLB released figures on media revenue but as you can see the White Sox were doing just fine.

http://www.baseballprospectus.com/article.php?articleid=1297

Now of course The Tribune "discounts" whatever their TV rights are with WGN but the fact remains JR was doing very nicely.

PaleHoseGeorge

11-12-2004, 02:44 PM

Hmmm....I'll see if I can find the articles, but I thought there were specific comments that the owners introduced salary floor proposals in the CBA but Fehr shot them down using a "we don't want to put any restrictions on how owners decide to run their teams" argument.

As for the floor, you're right, it doesn't improve balance, but it does help make sure that teams aren't just pocketing revenue sharing $$$ (or at least pocketing less of it). I don't think competitive balance is something that can ever be legislated, but you can assist it by doing things that put more resources towards the on-field product.

EDIT: Here's a quote on the floor from ESPN (http://espn.go.com/sportsbusiness/s/2002/0814/1418040.html)

Now I'm not saying a $45mil floor helps much of anything, but had this been a negotiated point rather than being dismissed, a floor of say $55mil would have affected 12 teams, all of whom got revenue sharing.
It's a negotiation. That means things are put on the table specifically to be taken off, i.e. horse trading.

So the players' union says they're against a floor? Fine. That doesn't mean they didn't get something for giving the owners' cover for saying such a thing. Look at the final deal. The owners got a payroll tax. That's demonstrably worst for the players than a salary floor.

The CBA is tighty little conspiracy between the owners and players. They need each other to survive. A little cooperation on one issue helps grease the skids on another issue. This is the reality of any negotiation.

Flight #24

11-12-2004, 02:52 PM

It's a negotiation. That means things are put on the table specifically to be taken off, i.e. horse trading.

So the players' union says they're against a floor? Fine. That doesn't mean they didn't get something for giving the owners' cover for saying such a thing. Look at the final deal. The owners got a payroll tax. That's demonstrably worst for the players than a salary floor.

The CBA is tighty little conspiracy between the owners and players. They need each other to survive. A little cooperation on one issue helps grease the skids on another issue. This is the reality of any negotiation.You got any support for that being one of those "horse trading" items? Not trying to pick on your comment, just curious if that's your inferral or if you saw/heard/read anything to that effect.

For the record, I believe the owners were serious about a salary floor, but only because it would lay the groundwork for a cap in future years. MLBPA of course don't want anything that could possibly lead towards a cap.

PaleHoseGeorge

11-12-2004, 03:05 PM

You got any support for that being one of those "horse trading" items? Not trying to pick on your comment, just curious if that's your inferral or if you saw/heard/read anything to that effect.

For the record, I believe the owners were serious about a salary floor, but only because it would lay the groundwork for a cap in future years. MLBPA of course don't want anything that could possibly lead towards a cap.
You want evidence? Did you bother to read what I wrote?
Look at the final deal. The owners got a payroll tax. That's demonstrably worst for the players than a salary floor.

You want to believe the players' union negotiated themselves a worse deal than the one they publicly claimed they were against? Sure, that might leave a shadow of doubt in some peoples' minds. However most of these same people probably believe in Santa Claus and the Easter Bunny, too.
:wink:

It's a negotiation. Put your faith in what the final deal says, not the posturing before the final deal is struck.

Flight #24

11-12-2004, 03:28 PM

You want evidence? Did you bother to read what I wrote?

You want to believe the players' union negotiated themselves a worse deal than the one they publicly claimed they were against? Sure, that might leave a shadow of doubt in some peoples' minds. However most of these same people probably believe in Santa Claus and the Easter Bunny, too.
:wink:

It's a negotiation. Put your faith in what the final deal says, not the posturing before the final deal is struck.
Let me be clear: I don't for a second think that the MLBPA said "no, we won't take a salary floor, how about we use a luxury tax instead".

As I recall, the tax was in place in the prior CBA, no? The owners were never proposing to take that off of the table, so the scenario where they "negotiated themselves a worse deal" isn't really the case. The proposals were for luxury tax AND a floor (along with, IIRC, increased revenue sharing), and the MLBPA dinged the increased revenue sharing as well as the floor with speculation being that they didn't want to introduce anything that could detract from their claim that owners should be free to spend how much or little they want.

So in effect, what they negotiated was: Luxury tax+decreased revenue sharing+ability to maintain their stance on salary caps rather than Luxury tax+increased revenue sharing+a loss of their philosophical stance on salaries.

Uh-oh, looks like I've done the old...:hijacked:
:smokin:

Daver

11-12-2004, 03:36 PM

Let me be clear: I don't for a second think that the MLBPA said "no, we won't take a salary floor, how about we use a luxury tax instead".

As I recall, the tax was in place in the prior CBA, no? The owners were never proposing to take that off of the table, so the scenario where they "negotiated themselves a worse deal" isn't really the case. The proposals were for luxury tax AND a floor (along with, IIRC, increased revenue sharing), and the MLBPA dinged the increased revenue sharing as well as the floor with speculation being that they didn't want to introduce anything that could detract from their claim that owners should be free to spend how much or little they want.

So in effect, what they negotiated was: Luxury tax+decreased revenue sharing+ability to maintain their stance on salary caps rather than Luxury tax+increased revenue sharing+a loss of their philosophical stance on salaries.

Uh-oh, looks like I've done the old...:hijacked:
:smokin:
No, the tax was not in place in the prior CBA. This was the first time that the MLBPA agreed to any form of salary restraint. I have no idea why you continue to dwell on the salary floor issue, it had almost no chance of recieving the approval of the 75% of the owners, let alone being agreed on by the MLBPA. Like George stated already, it was a negioating tool just like any other negotiation tool.

Flight #24

11-12-2004, 03:41 PM

No, the tax was not in place in the prior CBA. This was the first time that the MLBPA agreed to any form of salary restraint. I have no idea why you continue to dwell on the salary floor issue, it had almost no chance of recieving the approval of the 75% of the owners, let alone being agreed on by the MLBPA. Like George stated already, it was a negioating tool just like any other negotiation tool.
Not trying to dwell on it, just curious as to the circumstances surrounding the negotiations on that point. I'll let it go.

PaleHoseGeorge

11-12-2004, 03:43 PM

....As I recall, the tax was in place in the prior CBA, no? The owners were never proposing to take that off of the table, so the scenario where they "negotiated themselves a worse deal" isn't really the case.

Wrong. The last CBA did away with a much weaker payroll tax the final year of the contract's duration. There was no payroll tax in place when A-Rod signed for his record salary back in December, 2000... not that there would be a correlation that the owners would ever admit to, of course.

The owners wanted the payroll tax back. They got it. The final deal confirms these as facts. What more do you need to know?
:cool:

I dare say the reason the owners wanted the payroll tax back was specifically because the A-Rod deal showed just how much headroom the old payroll tax was dragging down salaries. In fact the CBA Fehr negotiated in 1995 specifically put that stipulation into the deal because he wanted to impress upon his membership how much they were losing from the payroll tax.

Obviously Fehr wasn't strong enough to keep the payroll tax from coming back. His negotiating position is only as strong as his rank and file makes him.

Flight #24

11-12-2004, 03:48 PM

Wrong. The last CBA did away with a much weaker payroll tax the final year of the contract's duration. There was no payroll tax in place when A-Rod signed for his record salary back in December, 2000... not that there would be a correlation that the owners would ever admit to, of course.

The owners wanted the payroll tax back. They got it. The final deal confirms these as facts. What more do you need to know?
:cool:

I dare say the reason the owners wanted the payroll tax back was specifically because the A-Rod deal showed just how much headroom the old payroll tax was dragging down salaries. In fact the CBA Fehr negotiated in 1995 specifically put that stipulation into the deal because he wanted to impress upon his membership how much they were losing from the payroll tax.

Obviously Fehr wasn't strong enough to keep the payroll tax from coming back. His negotiating position is only as strong as his rank and file makes him.
Ah yes, I forgot the expiration of the tax in the last CBA year. Didn't mean to make this a discussion on the last negotiations, just couldn't recall. Back to your regularly scheduled discussion.

Lip Man 1

11-12-2004, 07:04 PM

For what it's worth from the Phil Rogers interview at WSI:

ML: Revenue sharing and competitive balance were the central issues in this discussion but the agreement makes no provisions that teams have to spend revenue sharing money on players. What safeguards are there that owners will try to get better?

PR: "There isnít a minimum payroll requirement because the union objected to having one, the owners tried to get one put in. That being said, it has recently come out that clubs who get revenue sharing money must file a report every year to the commissionerís office detailing where and how that money was spent. The commissioner then has the power, if he doesnít like where the money is going, to levy substantial fines on teams. The money has to be spent on things like player salaries, adding minor league teams or stadium improvement."

ML: Then how does that square with published accounts quoting Jerry Reinsdorf as saying in the owners ratification meeting, that teams should use that money towards reducing operating debt rather then going to player acquisitions or salaries?

PR: "Iíve seen that story. All I can tell you is that I was at that meeting and all reporters were outside the conference room. I know that when Iíve tried to get comments from owners afterwards in these kind of situations, they were always tight lipped. I canít vouch for the veracity of that story. Assuming that comment was made, I donít think reducing team debt would fall under the guidelines of where revenue sharing money has to go, therefore the commissioner would get involved to stop it."
ML: How does the new agreement affect the White Sox?

PR: "The Sox will have to spend about a million dollars more on player salaries because the minimum salary level went up. The Sox wonít be affected as much because theyíve always been in the middle. Long term, if they make the playoffs they eventually might stand a better chance of winning something because the new agreement should put a drag on salary levels with the top spending teams."

Lip

JKryl

11-13-2004, 11:55 AM

From Ron Rapoport's column today in the Sun-Times:

"Bud Selig is delighted at how baseball's enhanced revenue-sharing plan is working out, and why not? Forbes Magazine notes that since the plan went into effect, the Brewers' share has increased from $2 million a year to $18 million, which makes it one of the game's most profitable teams. Not bad considering the Brewers' $28 million payroll and 12 straight losing seasons."

Yea I pity those poor owners losing so much money.

Lip
With the way the playoffs and trades have been going lately, it looks like Selig has Steinbrenner writing the checks directly to him. Maybe that accounts for Selig's refusal to put the kibosh on any trades lately. Legal payoff!

JKryl

11-13-2004, 12:03 PM

I remember reading many times about George Steinbrenner getting violently angry at owner meetings talking about revenue shariung.

One time he said that he'd agree to revenue sharing when then Twins owner Calvin Griffith kicked off all his relatives off the team payroll and when he told the Expos one time that he'd agree to revenue sharing when he was allowed to look at their books.

Considering what has now come out about the Brewers, the Reds and the Royals in the past two years, it seems clear to me that these 'poor' clubs are pocketing a large portion of that shared money instead of signing players and developing their franchises.

Nice con job those clubs have done to the rest of MLB.

My solution, fold em' or force new ownership in based on the guarantee that they have to spend revenue sharing money on getting players...not fixing the stadium...not paying it out to untested draft picks or to the nebulous term 'minor league player development.' Since the odds are remote who could sign, develop and keep enough good players at the same time to start winning in two or three years.

Lip
Good sentiments, Lip, but I don't think it will work. If the likes of Boras knows that the pot swells by "X" dollars, he's going to demand the extra money for his "stars". In other words, the payroll will go up for the same over paid players that are getting the money now. The option of having the money for other purposes helps eliminate this problem. Maybe the caveate should be to spend the money to benefit the franchise, not as dividends or bonuses for owners. Oh, what the hell, they're not going to listen to us anyway.

ondafarm

11-13-2004, 12:04 PM

Are you trying to say that those teams you mentioned don't make a profit? If you are you are mistaken, every one of those teams is worth more now than it was when the current owner bought it.
A) that's not the standard definition of 'making a profit'

but

B) those were just three examples of small market teams with less television money than the White Sox. Of course, should the White Sox broadcast all their games (or all allowed under the current contract) on free television, their television contract would be worth quite a bit more. But then again, I'm just a supply side economist at heart.